POB 5.02 #2

The possibility of a financial loss is called a

• Risk

• Guarantee

The possibility of loss to a business without any possibility of gain.

• Pure Risk

• Speculative Risk

A high unemployment rate causes a downturn in the retail sales for the year. What type of risk?

• Human

• Economic

Because of a flu epidemic, a local school district must employ additional substitutes. What type of risk?

• Natural

• Human

Hurricane Floyd led to increased losses for insurance companies. What type of risk?

• Economic

• Natural

What type of risk involves chances of loss that may result in loss, no change, or gain?

• Speculative Risk

• Pure Risk

Which is an example of a speculative business risk?

• A special promotion fails to increase sales.

• A cashier gives unauthorized discounts to friends.

A business selects goods or services to sell. Which type of risk is this business using?

• transferring risk

• controlling risk

Which represents a natural risk for the owner of a delivery service?

• snowstorm

• rising prices

When it rains, you place rubber mats in the entryways of your business. What type of risk?

• Reduction

• Avoidance